New Labour

New Labour was a period in the history of the Labour Party (and the United Kingdom in general) from the mid-1990s until 2010 under the leadership of Prime Ministers Tony Blair and Gordon Brown. Under Blair, the Labour Party abandoned socialism and nationalization and drifted towards the political center, attracting a significant number of middle-class and upper-class supporters in addition to its working-class base. After the shocks and upheavals of the 20th century, Britain entered a new millennium with its people prosperous, unemployment low, and freedom and democracy intact. In the following decade, however, terrorism and counterterrorism and a brush with finacial catastrophe suggested that the present century was shaping up to be as troubled as the last. The problem-plagued premiership of Gordon Brown, lasting from 2007 to 2010, was followed by a close-fought general election and a coalition government of Conservatives and Liberal Democrats, ending the New Labour era.

Background
The election of Tony Blair as Prime Minister in May 1997 ended 18 years of Conservative rule and ushered in a new era in British political life. As leader of the Labour Party from 1994, Blair abandoned its long-standing commitment to the state control of key industries and embraced the wealth-creating potential of free enterprise, in effect accepting the economic changes wrought by Thatcherism. His "New Labour" won a landslide victory in the 1997 general election against John Major's Conservatives. At 43, Blair was the youngest British prime minister in the 20th century.

History
By the late 1990s, Britain appeared to have recovered from the persistent economic and financial problems that had plagued the country for decades. Inflation was below 1.5% and the unemployment rate around 5.5% - both among the lowest figures in Europe. The British economy boomed, growing in every quarter of every year during the decade from 1997 to 2007. Although wealth was unequally shared, most British people benefited to some degree by rising living standards, helped by the introduction of a minimum wage and greater job opportunities. Government spending on the National Health Service and on education rose steeply. The strength of the pound made it seem unnecessary for Britain to join the European single currency in 2002; Britain was one of only three European Union states to stay outside the Eurozone.

Labour Prime Minister Tony Blair and his Chancellor of the Exchequer Gordon Brown inevitably took much of the credit for this rosy economic situation, which was the single largest factor in securing further Labour general election victories in 2001 and 2005.

The downside
Some aspects of the economic prosperity provided cause for disquiet. British manufacturing continued its seemingly irreversible decline, although it was compensated by rapid growth in the services and financial sector. Gross inequalities in wealth were highlighted by the bonus culture of banks and finance companies, which made lump sum payments to employees equivalent to a lifetime's earnings for others. Britain was away with easy money - consumption was fuelled by credit-card borrowing and property prices inflated by the availability of cheap mortgages.

The news that the Northern Rock bank was on the verge of collapse in 2007 marked the beginning of the credit crunch and the end of the long boom. Inheriting the premiership from Blair, Gordon Brown found himself at the forefront of an international effort to stem a global banking collapse, taking failing banks into state ownership at the expense of a vast expansion of budgetary deficit and public debt.

A period of change
The period of Tony Blair's premiership from 1997 to 2007 brought some radical reforms in Britain's system of government. Since the 1970s, the Scottish National Party had been a significant force in British politics. Blair was not prepared to accept the SNP's demand for independence, but instituted a Scottish Parliament with a devolved government exercising considerable powers in 1999. Wales was also given its own assembly. When a Catholic-Protestant power-sharing executive was made to function in Northern Ireland, England was left as the only part of the United Kingdom without a devolved parliament and government. There was also a radical change in Westminster. All but 92 hereditary peers lost their seats in the House of Lords in 1999.

Evolving attitudes
One significant aspect of the 1997 election was the number of seats won by women MPs - 119 in all, compared to 24 women elected in 1974. This reflected ongoing changes in attitudes towards women and their expectations. In the first decade of the 21st century, 70% of British women had paid employment, one of the highest in the world. Although a lot of these jobs were part-time and women remained under-represented in boardrooms, it was true that many barriers to women's advancement had crumbled and gender roles had become far less sharply defined.

Attitudes to homosexuals also underwent a radical transformation. To be known to be gay was no longer a bar to advancement in politics or almost any other area of life, and by 2010 the annual Gay Pride marches had become popular festivals rather than acts of protest. Of course, sexism and homophobia continued to flourish among individuals and groups who were at odds with the dominant liberal consensus. The issues of race and immigration remained contentious, despite the officially adopted ideology of multiculturalism and generally high levels of integration. The West Indian and Asian presence in Britain was long established, but the expansion of the European Union to include the countries of Eastern Europe in 2004 was followed by a fresh influx of immigrants. In 2008, more than one in 10 of the UK population had been born abroad.

Terrorist threat
The growth of international Islamic terrorism and British military involvement in contentious wars in Afghanistan and Iraq led to concerns about the allegiance of Britain's Muslim minority. In July 2005, suicide bomb attacks on Underground trains and a bus in London killed 52 people. Three of the men responsible for the atrocity were British-born Muslims. Britain's security services reacted to the threat of terrorism efficiently, stopping many plots from reaching fruition, but also committed serious errors, notably the killing of the innocent Brazilian Jean Charles de Menezes in the wake of the 2005 bombings. The use of special powers to combat terrorism led to fears of an erosion of civil liberties. Britain in the 21st century was characterized as much by its profusion of security cameras and large prison population as by its tolerance and diversity.

Aftermath
The problem-plagued premiership of Gordon Brown, lasting from 2007 to 2010, was followed by a close-fought general election and a coalition government of Conservatives and Liberal Democrats. The Brown administration steered a perilous path through the economic crisis of 2007-08, avoiding a banking collapse and alleviating recession. The negative political effects of the crisis were magnified by a scandal involving MPs' expenses. In the election of May 2010, David Cameron's Conservatives won only 36% of the popular vote and no overall majority in Parliament. Cameron negotiated a coalition with Nick Clegg's Liberal Democrats to become Prime Minister, embarking on a rigorous policy of public spending cuts.